03 April 2023
If you are covering the Office for National Statistics Census data on the profile of the older population, please find below a comment from Jon Greer, head of retirement policy at Quilter:
“The Office for National Statistics latest census data points to a pension age cohort who are feeling healthier, but with potentially more complex planning needs with increasing life expectancy and changes in care needs and relationship status. Ultimately, this shines a spotlight back onto the sustainability of the state pension and at what age people can expect to receive it.
“The ONS found that the number of people aged 65 years and over increased from 9.2 million in 2011 to over 11 million in 2021 and the proportion of people aged 65 years and over rose from 16.4% to 18.6%. While life expectancy growth is slowing, the fact of the matter is that the UK has an ageing population, and this has become somewhat of a demographic ticking timebomb. As we have seen in the recent debates around the state pension, having an ageing population is going to put huge pressure on the public finances as fewer tax revenues are received at a time when more welfare payments are required.
“The state pension age question may have been kicked into the long grass for now, but with more and more people collecting their pension and living longer reform cannot be ignored indefinitely. Indeed, while the political hot-potato that is the state pension triple lock will likely come into the firing line again around the next election, it is inevitable that at some point it will need to be replaced with a less generous uprating mechanism, though exactly what this looks like remains to be seen.
“The data also highlights how across all older age groups, men and women are feeling healthier compared to the Census in 2011. Most age groups are also reporting less bad or very bad health, pointing to a group of the population that, despite the data being collected during the Covid pandemic, felt a general improvement in their health over time . Given the government’s pleas to get older people back into the workforce, they will be heartened to see people feeling in good health and potentially being able to continue in employment during the early years of their older age.
“However, it also stresses the need to ensure any pension provisions can last in your retirement as for some in good health they could expect to live for 30 years or more. The last things retirees need is to have their pension pot run dry as they age, and especially if they are feeling in good health and able to continue doing the things they love. Assessing how long your pension pot could last over the course of a long retirement is crucial from the outset of giving up work, giving you time to adapt your retirement plans and ensure you manage your pot as efficiently as you can.”
